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Derivative Instruments
 6 Months Ended
Jun. 30, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments
Derivative Instruments
We use derivative instruments as part of our overall foreign currency and commodity risk management strategies to manage the risk of exchange rate movements that would reduce the value of our foreign cash flows and to minimize commodity price volatility. Foreign currency exchange rate movements create a degree of risk by affecting the value of sales made and costs incurred in currencies other than the U.S. dollar.
Certain of our derivative contracts contain provisions that require us to provide collateral. Since the counterparties to these financial instruments are large commercial banks and similar financial institutions, we do not believe that we are exposed to material counterparty credit risk. We do not anticipate nonperformance by any of the counter-parties to our instruments.
Foreign currency derivatives
We enter into foreign currency derivatives from time to time to attempt to manage exposure to changes in currency exchange rates. These foreign currency instruments, which include, but are not limited to, forward exchange contracts and purchased currency options, attempt to hedge global currency exposures such as foreign currency denominated debt, sales, receivables, payables, and purchases. Forward exchange contracts are agreements to exchange different currencies at a specified future date and at a specified rate. There was no ineffectiveness on these contracts designated as hedging instruments during the six months ended June 30, 2014 and 2015, respectively.
In 2014 and 2015, we entered into foreign currency derivatives denominated in the Mexican peso, South African rand, Brazilian real, euro and Japanese yen. These derivatives were entered into to protect the risk that the eventual cash flows resulting from commercial and business transactions may be adversely affected by changes in exchange rates between the U.S. dollar and the Mexican peso, South African rand, Brazilian real, euro and Japanese yen. As of June 30, 2015, we had outstanding Mexican peso, South Afican rand, euro, and Japanese yen currency contracts with an aggregate notional amount of $72.5 million. The foreign currency derivatives outstanding as of June 30, 2015 have several maturity dates ranging from July 2015 to December 2015.
Commodity derivative contracts
We periodically enter into derivative contracts for certain refined oil products and natural gas. These contracts are entered into to protect against the risk that eventual cash flows related to these products may be adversely affected by future changes in prices. There was no ineffectiveness on these contracts during the six months ended June 30, 2015. As of June 30, 2015, we had no outstanding derivative swap contracts for refined oil products.
Net Investment Hedges
We use certain intercompany debt to hedge a portion of our net investment in our foreign operations against currency exposure (net investment hedge). Intercompany debt denominated in foreign currency and designated as a non-derivative net investment hedging instrument was $15.8 million and $15.1 million as of December 31, 2014 and June 30, 2015, respectively. Within the currency translation adjustment portion of other comprehensive income, we recorded gains of $0.2 million and $0.1 million in three months ended June 30, 2014 and June 30, 2015, respectively, resulting from these net investment hedges.
The fair value of all derivatives is recorded as assets or liabilities on a gross basis in our Consolidated Balance Sheets. The following tables present the fair values of our derivatives and their respective balance sheet locations as of December 31, 2014 and June 30, 2015: 
 
Asset Derivatives
 
Liability Derivatives
 
Location
 
Fair  Value
 
Location
 
Fair  Value
As of December 31, 2014
(Dollars in Thousands)
Derivatives designated as cash flow hedges:
 
 
 
 
 
 
 
Foreign currency derivatives
Prepaid and other current assets
 
$
722

 
Other current liabilities
 
$
1,234

Commodity derivative contracts
Prepaid and other current assets
 
—

 
Other current liabilities
 
7,067

Total fair value
 
 
$
722

 
 
 
$
8,301

 
 
 
 
 
 
 
 
As of June 30, 2015
 
 
 
 
 
 
 
Derivatives designated as cash flow hedges:
 
 
 
 
 
 
 
Foreign currency derivatives
Prepaid and other current assets
 
$
924

 
Other current liabilities
 
$
613

Total fair value
 
 
$
924

 
 
 
$
613


 
 
 
 
 
 
 
 

 
Asset Derivatives
 
Liability Derivatives
 
Location
 
Fair  Value
 
Location
 
Fair  Value
As of December 31, 2014
(Dollars in Thousands)
Derivatives not designated as hedges:
 
 
 
 
 
 
 
Foreign currency derivatives
Prepaid and other current assets
 
$
80

 
Other current liabilities
 
$
428

Total fair value
 
 
$
80

 
 
 
$
428

 
 
 
 
 
 
 
 
As of June 30, 2015
 
 
 
 
 
 
 
Derivatives not designated as hedges:
 
 
 
 
 
 
 
Foreign currency derivatives
Prepaid and other current assets
 
$
181

 
Other current liabilities
 
$
474

Total fair value
 
 
$
181

 
 
 
$
474


The location and amount of realized (gains) losses on derivatives are recognized in the Statements of Operations when the hedged item impacts earnings and are as follows for the three and six months ended June 30, 2014 and 2015:
 
 
 
 
Amount of (Gain)/Loss
Recognized (Effective
Portion)
For the Three months ended June 30,
 
Location of (Gain)/Loss Reclassified from Other Comprehensive Income (Effective Portion)
 
2014
 
2015
(Dollars in Thousands)
Derivatives designated as cash flow hedges:
 
 
 
 
 
 
Foreign currency derivatives, excluding tax
  of ($3) and $56, respectively
 
Revenue / Cost of goods sold/Other expense / (income)
 
$
27

 
$
(563
)
Commodity forward derivatives, excluding
  tax of $181 and ($193), respectively
 
Revenue /
Cost of goods sold
 
$
(503
)
 
$
528

 
 
 
 
 
 
 
 
 
 
 
Amount of (Gain)/Loss
Recognized
For the Three months ended June 30,
 
Location of (Gain)/Loss Recognized in the Consolidated Statement of Operations
 
2014
 
2015
(Dollars in thousands)
Derivatives not designated as hedges:
 
 
 
 
 
 
Foreign currency derivatives
 
Cost of goods sold/Other expense (income)
 
$
130

 
$
(214
)

 
 
 
 
Amount of (Gain)/Loss
Recognized (Effective
Portion)
For the Six Months Ended June 30,
 
Location of (Gain)/Loss Reclassified from Other Comprehensive Income (Effective Portion)
 
2014
 
2015
(Dollars in Thousands)
Derivatives designated as cash flow hedges:
 
 
 
 
 
 
Foreign currency derivatives, excluding tax
  of ($33) and $128, respectively
 
Revenue / Cost of goods sold/ Other expense / (income)
 
$
328

 
$
(1,275
)
Commodity forward derivatives, excluding
  tax of ($9) and ($289), respectively
 
Revenue /
Cost of goods sold
 
$
26

 
$
793

 
 
 
 
Amount of (Gain)/Loss
Recognized
For the Six Months Ended June 30,
 
Location of (Gain)/Loss Recognized in the Consolidated Statement of Operations
 
2014
 
2015
(Dollars in thousands)
Derivatives not designated as hedges:
 
 
 
 
 
 
Foreign currency derivatives
 
Cost of goods sold/Other expense (income)
 
$
(61
)
 
$
676


Our foreign currency and commodity derivatives are treated as hedges and are required to be measured at fair value on a recurring basis. With respect to the inputs used to determine the fair value, we use observable, quoted rates that are determined by active markets and, therefore, classify the contracts as “Level 2”.